Shell Chemicals informed customers Thursday that it will extend a force majeure for supply of ethylene oxide and glycol products after a malfunction during a turnaround restart at its Geismar, Louisiana, facility forced a prolonged shutdown, according to a letter obtained Friday by Platts.
Shell was uncertain how long the shutdown would last, according to the letter, which noted that products impacted include EO and all grades of monoethlyne glycol and diethylene glycol. The plant has a MEG capacity of 400,000 mt/year. It was unclear what type of problems occurred during the restart.
MEG prices spiked after Hurricane Isaac hit the US Gulf Coast in late August, causing production issues for producers that are still contributing to a tight supply. Spot barge deals were heard at 43 cents/lb in early August, and the spot price was assessed by Platts at 55-57 cents/lb on Friday. Industry sources said October MEG contracts were expected to rise by 5-8 cents/lb.
Shell's force majeure at the Geismar facility was initially announced shortly after Hurricane Isaac hit, and was seen as the most significant factor to the decrease in MEG supply though supply was tight globally with production constraints heard in the Middle East and in Europe.
